Finding 390145 (2023-001)

(3) Findings and Questioned Costs – Major Federal Programs Item # 2023-001 Financial Policies and Procedures Update (Significant Deficiency in Internal Control over Federal Major Program) Criteria: 2 CFR Section 200.303 requires federal award recipients to establish and maintain effective internal controls over those awards. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our audit, we noted that the Organization does not have a comprehensive accounting policies and procedures manual that provides guidelines for internal control, cost allocation, financial reporting, and compliance with Uniform Guidance documentation requirements under 2 CFR Section 200.303. Cause: The Organization did not comply with the requirement for adequate internal control documentation set forth by the Uniform Guidance. Effect: Failure to have a comprehensive accounting policies and procedures manual that provides guidelines for internal control, cost allocation, financial reporting, and compliance with Uniform Guidance documentation requirements under 2 CFR Section 200.303 could result in ineffective monitoring of costs allocated to the federal program. Auditor’s Recommendation: The Organization should strengthen its internal control practices by updating its policies and procedures to comply with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout 2024 to be in full compliance with the Uniform Guidance. This exercise is anticipated to be complete by the end of the fiscal year.